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Short-term Missions Trip Income

Question:

My wife and I recently returned from a six-month mission trip. We were sent and supported by our church congregation. Our flight, living expenses, and mortgage back home were all covered by the church. We were supported directly by our home church as missionaries (no missions’ agency was employed). We received a Form 1099-MISC from the church listing all of our support as “Non-employee compensation.” How will I report this to make our trip expenses balance out?

Answer:

Non-employee compensation reported on Form 1099-MISC is included on Schedule C of IRS Form 1040. This Schedule allows business expenses to be deducted directly from income. In your case, business expenses will include your deductible trip expenses assuming you have adequate substantiation of the expenses as required by the IRS. Payments on your home mortgage are not deductible business expenses.

The members of my Federal Taxation I class at Maranatha Baptist Bible College in Watertown, Wisconsin have taken on the challenge of study and research to answer posted questions. Dan Chodan of Lancaster, Pennsylvania gets credit for this one.

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